gfiles magazine

June 13, 2011

From the Editor-in-Chief

From the Editor-in-Chief
OUR cover story may be unusual – defence of a public sector behemoth with a mixed track record – but it offers a critical and sharp insight into how lack of good governance – both by omission and commission – can hobble the larger interest of a nation. It is also a commentary on how economics comes full circle every now and then. In the Nehruvian era and then during Indira Gandhi’s rule, the public sector was unassailable. It was a sacred cow whose name you vilified in the press or in public utterances only at the peril of being branded a reactionary or anti-national.
Economist PC Mahalanobis deified an economic model of development and capital formation in underdeveloped countries by postulating that nationalized or public sector enterprises should rule the commanding heights of the economy. But, as the Soviet model of development, on which Mahalanobis had founded the Nehruvian economy – a trend that accelerated under Nehru’s daughter – began to crumble, India awakened into the dawn of liberalization in which the old shibboleths were unceremoniously jettisoned. Privatization and globalization, de-control and disinvestment, competition and entrepreneurship became the new magic watchwords as India hurtled headlong into policies applauded and egged on by the World Bank and the International Monetary Fund.
That was a heady period in which “world’s second fastest growing economy,” and “India Shining” became catch phrases for politicians and promoters of the new Indian dream that included a bulging, white goods-consuming middle class. Then followed the worldwide recession in which the US and European economies took a beating, their banking and financial systems crashed, and the unemployment lines grew longer and longer.
This crisis – which India mostly escaped because of its continued public spending and stricter regulation of banking and trading activities, stable agriculture, and a continuously growing domestic demand factor – nonetheless focused attention on “left of centre” economists like Nobel laureate Amartya Sen who emphasized that economic growth without inclusiveness and social growth was not economic growth at all but a mirage of numbers. He also emphasized the role of the public sector in boosting growth with justice and reducing disparities. This thinking spread rapidly in countries like the US and the UK where “nationalization” and massive government subsidies and spending, even at the risk of humongous monetary and fiscal deficits, were considered a more acceptable alternative to a full-fledged depression.
In India, the crisis forced a re-thinking on unbridled privatization of PSUs and blind disinvestment. This is not an argument supporting PSUs that are a drain on the public exchequer or a playground for babudom and political patronage. It is rather a case for seriously examining the social role the public sector can play –given the huge investment in it of the nation’s scarce resources – as well as for modernizing it and making it as profitable and efficient as the best of any American, Indian, or European private corporation.
That is why Naresh Minocha’s cover story on ONGC – the nation’s first oil explorationgiant – is an important learning experience. It details the great potential that a PSU like ONGC has for the public good and for catalysing a vibrant economy as well as the waste and mismanagement and deliberate manipulation by politicians and bureaucrats that are sacrificing its remarkable potential at the altar of vested interests.

Hobbling a champion horse

Hobbling a champion horse 
The neta-babu nexus is actually stifling ONGC to benefit the private sector

THE BJP-led National Democratic Alliance (NDA) government reduced the governance of public enterprises, including core sector ones, to the proverbial sale of the family silver. Had the NDA not lost the 2004 general election, there would perhaps have been no Navratna PSE left by now.
Now, though the Congress-led United Progressive Alliance (UPA) stopped the condemnation and privatization of public sector enterprises (PSEs), it retained privatization as the last option to save a PSE. In its second tenure, the UPA government has tried to create an illusion that it cares for PSEs and wants to enhance their wealth generation potential. It thus created a niche category called Maharatnas for the top-performing giant PSEs in December 2009.
The deception becomes clear by looking at the way the government has handled the management of two of the four Maharatnas – the Oil and Natural Gas Corporation (ONGC) and the Indian Oil Corporation (IOC) – leave aside the raw deal meted out to other PSEs.

Undercurrents of politics and corporate lobbying in the appointment of its CMD are eroding the value of ONGC.

IOC had to function without a regular Chairman-cum-Managing Director (CMD) for a full year since March 1, 2010, when S Behuria was denied extension even though he was some years away from superannuation. The company had two successive officiating CMDs till February 28 this year when RS Butola was appointed.
But ONGC is still bogged down in uncertainty. This Maharatna is being led by an officiating CMD, AK Hazarika, since January 31 this year after the retirement of RS Sharma. Hazarika, Director (Onshore), was not only asked to hold additional charge as CMD but was also given additional charge as Director (Exploration) as this post too fell vacant after the retirement of the incumbent. Corporate lobbying contributed to the delay in selection of a new CMD. This speaks volumes about the manner in which the government governs PSEs – with pressure and manipulation by various quarters.
Sharma’s appointment had also been delayed due to the machinations of vested interests. His appointment was finally regularized in July 2007, 13 months after he took additional plancharge as CMD. His selection as CMD was first turned down on the specious ground that the government wanted to induct talent from the private sector.

The powers that be want to ensure that ONGC does not pose any serious competition to private companies.

The post is the most coveted and most politically sensitive in the public sector. ONGC has been India’s most profitable PSE. It was the most valuable PSE in terms of market capitalization until May 16 this year when it was edged out by Coal India Limited (CIL), which was listed on the Bombay Stock Exchange only a few months earlier. CIL is now the country’s second most valuable company after Reliance Industries Ltd (RIL).
The under-currents of politics and corporate lobbying in the appointment of its CMD are contributing in the erosion of the value of ONGC. This has happened earlier, too. In October 2006, when Sharma served as a stop-gap CMD, RIL dislodged ONGC as the most valuable company.
The continuation of a stop-gap CMD, coupled with earlier delay in making the ONGC Board’s composition compliant with stock market regulations, has cast a shadow on the company’s fresh public offer. In December 2010, the government stated it would divest 5% stake in ONGC through a further public offer (FPO) in the domestic market. “The offering would be a ‘fast track issue’,” stated the Department of Disinvestment. The FPO has already been delayed by a few months. In all probability, it will be launched after the appointment of a regular CMD. Devaluation or under-valuation of ONGC is not the concern of the powers that be.
Not with standing the dismantling of the administrative price mechanism (APM) in the oil sector in March 2002, the government continues to use ONGC as an instrument of subsidization of petroleum products and of public welfare. The company is subject to ad hoc arrangements under which it shares subsidies on kerosene, cooking gas and diesel with other oil and gas PSEs. This not only reduces its net profit, leading to less income tax realization by the government, this casual approach also impacts ONGC’s market value in the eyes of investors.
The powers that be are always keen to have a pliable ONGC CMD, who would help in awarding several contracts on single tender basis or nomination basis to their favoured firms. As it is, ONGC is one of the largest contractors in the country. This profile offers the neta-babu combine an opportunity to influence the company management in changing tender conditions, re-tendering, and so on. More than that, the powers that be want to ensure that ONGC does not pose any serious competition to private companies. They want to ensure that its management aligns its projects and activities with the ones pursued by the private sector companies.
There is a tacit understanding between the ONGC management, the bosses in the Ministry of Petroleum and Natural Gas (MoPNG) and other stakeholders on minimizing friction in the oil and gas sector. This has spawned mediocrity, complacency and a propensity among the managers to err on the side of caution.
Such tendencies are discernible in implementation of projects, investment of surplus cash, acquisitions and mergers, organizational rejuvenation and so on. The time taken by ONGC from planning to commissioning of any project is far more than its private competitors. This is more relevant in the case of downstream integration projects. (See box, “Gassing around”.)

Gassing around! ONGC has had a tendency to squander opportunities and resources
THE Oil and Natural Gas Commission (as it was known then, later becoming the Oil and Natural Gas Corporation) played a stellar role in the birth of the Indian petrochemicals industry in the 1960s but thereafter failed to capitalize on this early lead. Its attempt to diversify into the business of petrochemicals since the late 1980s has been marked by tortuous delays, project abortions and goof-ups. It is thus unsurprising to see ONGC finally leaning on other public enterprises such as the Gas Authority of India Ltd (GAIL) and the Indian Oil Corporation (IOC) to minimize further turbulence in its stroll into downstream value-additions.
Way back in 1964, ONGC created a petrochemical division which in turn examined the techno-economic feasibility of setting up aromatics and olefins projects in Gujarat. 9, the government incorporated the Indian Petrochemicals Corporation Ltd (IPCL). ONGC can thus be credited with the birth of this Navratan company, which the NDA government sold to Reliance Industries Ltd (RIL) through a global bidding competition in 2002. Thereafter, in 2006, RIL and IPCL merged.
ONGC was later happy providing feedstock to IPCL from its gas processing complex(GPC) at Uran, Maharashtra, and to both IPCL and RIL in Gujarat from its GPC at Hazira. A GPC’s task is to remove impurities from natural gas and split the gas into different components to derive maximum value from this versatile fuel. The ethane and propane fractions are precursors to the building blocks for plastics and other petrochemicals. Similarly, the propane and butane fractions can be blended and marketed as liquid petroleum gas (LPG). The majority component, methane, is used as feedstock for production of nitrogenous fertilizers or as a fuel for power generation and so on. A GPC also produces natural gas liquids (NGL), similar to naphtha produced by refineries.
NGL/naphtha is a building block for several petrochemicals. In the 1980s and 1990s, ONGC revived the idea of setting up a plant for manufacture of paraxylene and other petrochemical intermediates. The project was a strategic fit for ONGC as the naphtha feedstock was produced by its GPC at Hazira. It even explored for long the idea of forming a joint venture with Bharat Petroleum Corporation Ltd (BPCL) to implement the project. But the project never moved beyond the detailed feasibility reports. The petrochemical flip-flop turned ironic in 2002-2003, when ONGC aborted its naphtha-based project for manufacture of food grade hexane (FGH) and special boiling point solvents (SBPS) for want of a long-term marketing arrangement. At the time IOC had offered to market these products without entering into a formal long-term marketing contract. The project, which was to use naphtha from the Hazira GPC, was being executed by public sector engineering enterprise Mecon Ltd when it was decided to shelve it.
ONGC’s reluctance to learn from its mistakes is clearly visible in the disjointed and improperly-sequenced approach in the planning and implementation of the mega petrochemicals complex at Dahej, Gujarat.
In 2003, it decided to set up a GPC downstream to the Petronet LNG Ltd (PLL) liquefied natural gas import terminal at Dahej. The GPC would extract ethane (C2), propane(C3) and butane (C4) fractions from the imported gas. But ONGC did not decide what it would do with the extracted fractions. After firming up the Dahej GPC project, it decided to use the fractions for manufacture of petrochemicals. And thus was born the idea of setting up a world class multi-feed petrochemicals complex at Dahej. The proposed complex would also use LNG from Uran and Hazira as supplementary feedstock.
THE Rs 976.08-crore GPC was completed in December 2008 but has not yet been commissioned. Plant is in preservation since January 2010,” says the ONGC annual plan for 2011-12. ONGC has been making frantic efforts to enter into interim marketing arrangements for C2, C3 and C4 since 2008.
The downstream petrochemicals complex is expected to be ready in the third quarter of 2013. ONGC has minimized its exposure to the Rs 19,535-crore complex by putting its ownership under a tripartite joint venture named ONGC Petro-additions Ltd (OPaL) with 26% equity stake. The other co-promoters are GAIL with 19% stake and the Gujarat State Petroleum Corporation (GSPC) with 5% stake. The remaining 50% of shares are to be offered to strategic investors and financial institutions. ONGC has been scouting for such investors for almost three years. The company formalized GAIL’s participation as co-promoter in January 2011 and has also given GAIL the task of marketing part of the production of the proposed complex as well as the right to set up a synthetic rubber plant within the complex.
In entry of petrochemicals through the refinery route, ONGC fares better. The company acquired a controlling stake in the Mangalore Refinery & Petrochemicals Ltd (MRPL)in March 2003. After turning around this loss-incurring subsidiary, ONGC put it on the expansion-cum-petrochemical integration route. It thus opened its petrochemical account with production of mixed xylenes by MRPL in 2006. MRPL is expected to complete the expansion of its refinery capacity to 15 million tonnes per annum (mtpa) from 9.69 mtpa by December this year. This will be followed by completion of a 440,000-tpa petrochemical-grade propylene unit in April 2012.
ONGC has also formed a joint venture with MRPL called ONGC Mangalore Petrochemicals Ltd – in which it has 46% stake while MRPLhas 3% – which is slated to complete an aromatics complex in the last quarter of 2012.

Take the Krishna-Godavari (KG) basin case. Both ONGC and RIL discovered gas in this basin around the same time in 2002. The latter, which was then a greenhorn compared to ONGC in E&P, started gas production in 2009. RIL has thus already monetized the discovery as well as helped the fertilizer, power and other industries generate wealth through KG gas utilization. ONGC is expected to start gas supplies from its KG basin assets in 2016-17.
THE comparison between the two giants drives home the point that ONGC needs to pull up its socks and the government has to provide full autonomy to the company’s management. (See box, “Head to head”.) In the past, the government has not only pushed ONGC towards mediocrity but also cited its very mediocrity as the excuse to privatize its discovered oil and gas fields or discourage it from tapping new business opportunities. That ONGC has to go a long way to improve its core competency, exploration and production of hydrocarbons has been succinctly said by the Comptroller and Auditor General (CAG). In its report on ONGC’s wholly owned subsidiary, the ONGC Videsh Limited (OVL), issued in March this year, the CAG says: “The company is yet to succeed as an (overseas E&P) operator.” It has pointed out that, of the 36 assets acquired at the exploration stage at a cost of Rs 6206.17 crore, only five have been successful. OVL’s major investment of Rs 46,285 crore is in nine assets that it acquired at the producing/discovered stage.

The ONGC management, the bosses in the Ministry and other stakeholders ensure minimal friction in the oil and gas sector.

The CAG recommends that OVL “should formulate a policy and prepare standard guidelines in line with practices of Petroleum Resources Management System for evaluation of investment opportunities for acquisition of producing, discovered and exploration assets so as to mitigate the risks.” As for E&P, the CAG says: “There is an urgent requirement for the Company to strengthen its internal control system, including its internal audit, and ensure a strong monitoring mechanism with multi-level controls for financial and operational activities. Also, the Company should put in place timely audit arrangements for audit of the JV partners.”

Head to head
On October 31, 2002, RIL reported discovery of India’s largest gas reserve in around 30 years in the KG basin.
? On November 25, ONGC announced that it too had discovered gas in the KG basin. The announcement came as clarification to the BSE’s query on a news story.

The company stated: “ONGC has struck hydrocarbons in a new culmination. This well falls in G1 structure, which extends from the shallow to the deepwater, where hydrocarbon find had already been established. The well is presently under testing and has flowed gas. The testing of the well will add new reserves. ONGC had gas leads from two deepwater exploratory wells located in its deepwater PELs, on Godawari Deep-GD and Krishna Deep-KD structures situated off the mouth of rivers Godawari and Krishna, in water depths of 677 and 850 meters and drilled depth of 2706 and 3460 meters, respectively.” ONGC also acquired 90% Participating Interest in Exploration Block KG-DWN-98/2 from M/s Cairn Energy India Ltd in 2004 - 05 for a lump sum consideration of Rs 3,71.12 crore. Says an ONGC document: “Initial-in-Place-Reserves have been established in this block and a conceptual development plan is also under preparation. This being deepwater block, needs more time for completion of appraisal programme.”

? On April 2, 2009, RIL announced start of commercial gas supplies from the gas of its four KG basin assets/discoveries. A company release said: “RIL has started gas production in six and a half years from discovery, in comparison to the world average of 9-10 years for similar deepwater production facilities.”

? Compare this with ONGC’s hesitancy in enlightening the public on its KG basin gas development prospects. Answering a query from an investment analyst at a conference call on January 28 this year as to when the company would file a field development plan for its KG basin offshore blocks, ONGC Director (Finance) DK Sarraf said: “I think this question we would not like to address

It is not the first time the CAG has pointed out laxity and deficiencies in ONGC’s functioning. In its report (no. 6) of 2005, the CAG audited 195 arbitration cases out of 212 existing / settled cases in ONGC and found ambiguities and other deficiencies in contracts. The CAG stated, “A more efficient and effective contract management mechanism may reduce the incidence of disputes and arbitration in ONGC. It also needs to frame clear policies relating to appointment of Arbitrators and Advocates, payment of fees and time period for finalising the cases in order to ensure timely and economical settlement of cases. Timely pursuance of the conciliation mechanism may also help ONGC in settlement of pending cases.” s.”
APART from improving its operational efficiency, ONGC also needs to take a hard look at treasury operations to improve its “other income” and thus net profit. The company had surplus cash of over Rs 14,000 crore parked in relatively safe investments as of March 31, 2011. The company is happy complying with investment guidelines laid down by the Department of Public Enterprises (DPE). ONGC parks its surplus funds in the UTI liquid cash plan and in term deposits of specified banks. It does not invest funds in inter-corporate deposits, debentures, equity shares and other financial instruments. A cash-awash company has to strike a balance between risk and returns. It cannot and should not play safe by investing funds in relatively secure instruments.
ONGC had shied away from implementing the recommendations of the PricewaterhouseCoopers (PWC) report on efficient deployment of surplus funds in 2002. The ONGC Board appreciated PWC’s “well thought-out study” that called for increasing risk appetite and duration of investments. The Board, however, felt that there was a need to exercise caution and take a considered view. It said, “At no time, the investment decision be such which are outside the extant DPE guidelines, and wherever need be, due clarification / relaxation be obtained from DPE.”

Mandarins face the heat—finally!

Mandarins face the heat—finally!
Sermonizing is all very well, but only concrete steps can stem the rot


PRIME Minister Manmohan Singh is yet again on a sermonizing spree with regard to corruption. His latest was on Civil Services Day: “Corruption is an impediment to faster growth, and hurts the poor most. It is a challenge that we must tackle boldly and we stand committed to doing so.” He added, “There is little public tolerance now for the prevailing state of affairs. People expect swift and exemplary action and rightly so” and “Our aim is to strengthen the legislative framework, revamp administrative practices and procedures and fast-track a systemic response to fighting corruption.”
The venerable doctor has been in the saddle for the past seven years –more than a political leader can hope for. Yet, he has just started “fast-tracking a systemic response to fighting corruption”.
That too, with much reluctance after getting prodded by the force of public opinion. “A committee of Ministers and representatives of civil society is at work to finalize the draft of a Lokpal Bill which we hope to be able to introduce during the monsoon session of Parliament,” according to the Prime Minister. This, 43 years after the introduction of the original Lokpal Bill in Parliament (1968). That was the year I entered the IAS after my Army stint and I am long retired! Even this slowest-ever “fast-tracking” is being side-tracked by his Man Friday, Kapil Sibal, with his propensity for bluff and bluster. It is doubtful if the Anna Hazare-driven Lokpal Bill will ever see the light of day in its original form.

Mukherjee’s move follows the CBI’s discovery that retired civil servants like former TRAI chairman Baijal were connected with companies dealing with the telecom sector.

Further, the PMO’s shenanigans vis-à-vis the CWG scam, the 2G loot, the ISRO Devas racket, the Prasar Bharati sleaze, the CVC fiasco, the Rajat Gupta largesse, Chatwal’s Padma Bhushan and the reprehensible PAC ruckus to protect top officials remain unexplained.
A parallel to all this can be perceived in Christianity, known for beautiful sermons. The Sermon on the Mount is the most poignant and prominent among these, especially the three Beatitudes that convey the essence of Christianity: “Blessed are those who hunger and thirst for righteousness, they shall be filled”; “Blessed are the pure in heart, for they shall see God” and “Blessed are those who are persecuted for righteousness’ sake, theirs is the kingdom of heaven.” These are recanted by the priests, pastors and bishops of the Church who also sermonize on Jesus’ teachings emphasising the core Christian values of humility, simplicity, honesty, and piety.
But what they do in practice is often just the reverse. As a result, there is corruption, mismanagement of assets, properties and finances, and abuse of power by priests, pastors and bishops. This has led to major scandals and even crimes. There is a strong streak of materialism and greed which is violative of the basic tenets of Christianity and there is no law or institution to rein them in.
Yet, our sermonizing Prime Minister deserves compliments for some positive action, notably, ratifying the United Nations Convention against Corruption that has been pending for nearly eight years. According to him, “The ratification is a reaffirmation of our government’s commitment to fight corruption and to undertake vigorously administrative/ legal reforms to enable our law enforcement agencies to recover the illicit assets stolen by corrupt practices.”
Some more positive action can be seen in Finance Minister Pranab Mukherjee getting set to let loose the proverbial bull in the china shop and crying a halt to large-scale “collusive corruption” among manipulative and manoeuvring mandarins. With half-a-dozen senior civil servants already in prison, it may now be the turn of retired bureaucrats to lose sleep.
Wounded deeply by a plethora of corruption charges against its political leaders and Ministers, the government is likely to launch a serious probe against more than 150 retired civilians who have taken up direct or indirect jobs with India Inc and multinationals operating in India.
The Empowered Group of Ministers headed by Mukherjee is toying with the idea of instructing investigative agencies to probe the wealth and income of the former bureaucrats who are consultants, advisers or members on various boards or have opened their own consultancy companies.
Mukherjee’s move follows the CBI’s discovery that many retired civil servants like former TRAI chairman Pradeep Baijal and former Telecom Secretary VS Mathur were connected with various companies dealing with the telecom sector.
The probe will not be limited to ex-IAS officers. Nearly a dozen retired senior IFS officials, 18 ex-chiefs and directors of Public Sector Undertakings and around six former IPS officials will also be investigated.
Though none of them faced corruption charges in service, the government has decided that officers who retired from Ministries like Finance, Civil Aviation, Surface Transport, External Affairs, Petroelum, Tele-Communications, Public Sector Banks, Commerce and Defence will come under the scanner. The agencies have already started screening the names of top executives of corporations dealing with infrastructure, real estate, power, mining, steel and aviation.
THOUGH the government is yet to finalise the modalities, various agencies like the CBI, CVC, Enforcement Directorate and the Income Tax Department will be asked to collate information and forward it to the Special Investigation Team that has been set up following the Supreme Court intervention on black money.
This is a laudable effort, but should also extend to mid-career officers at the Centre and States who join lucrative private jobs with huge pay or perks. This is obviously part of a quid pro quo and is the outcome of the government’s efforts to mortgage core sectors like roads, telecom, power, banking, insurance, real estate, aviation, mining and so on to corporates and multinationals. The fallout is virtual privatization of India’s administrative system, licentiousness in the civil services and abandonment of governance virtues.
In the event, greed has set in at all levels of government with the manifesting stink and rot. Sermons cannot stem this stink, only decisive action can.

‘I don’t care who is on the Lokpal panel’

‘I don’t care who is on the Lokpal panel’
 But they must represent civil society at large, not a few luminaries
THE movement initiated by Anna Hazare was a huge success, especially in roping in the urban middle class. In a democracy, it is the inalienable right of the citizens to voice their concerns and seek redressal of their grievances through their elected representatives. And if the latter do not pay heed to their problems and concerns, it is equally legitimate for them to raise their voice collectively. More often than not, such collective agitations fail to elicit a favourable response from those in authority. But there are rare instances when the rulers come down from their exalted perches and listen.
The four-day agitation at Jantar Mantar and elsewhere in the country was such an occasion. The government agreed to consider a robust piece of legislation against corruption in consultation with civil society. This has never happened before in the Constitutional history of India. Hazare and his colleagues deserve the gratitude of the people for making the impossible happen. The debate on whether it sets a dangerous precedent stands deferred for another day.
Thanks to Hazare and his followers, corruption is at centrestage today. Yet, corruption in India is invincible. However much we may try to suppress it, condemn it or enforce legislation to curb it, its source remains untouched. The source, as all of us know, is the greed for money, power and fame. You and I have to find ways of conquering it, not the government and surely not the drafting committee of the Jan Lokpal Bill.
Therefore, though it is important to take the fight against corruption one step forward, the drafting committee has a limited task on hand. The notion that the Bill would be a panacea for all the ills of governance is far-fetched. We should attach only that much importance to it as deserved.
The selection and the subsequent actions of the drafting committee, however, raise a number of issues in the limited context of framing a new law against corruption. It should be accepted by all that the draft is not absolute. Those who think the draft prepared by Prashant Bhushan, Santosh Hegde, Arvind Kejriwal and their friends is the final word are going to be disappointed soon. If they are not open to conviction in the drafting committee, either Parliament will make drastic changes in it or it will be declared by the Supreme Court as ultra vires of the Constitution.
First, it should be remembered by all, including the framers of the Bill, that the resulting institution will not be a civil society one. It will be an institution of the state, hopefully at an arm’s distance from the government of the day. Therefore, it should be as responsible and accountable as is expected from other agencies of the state. To make it an all-powerful inquisitor, advocate and judge would be folly. Also, its lines of accountability should be clearly defined, not in a roundabout manner as suggested in the present Bill.
Where misuse of power is the problem, it would be unwise to create a new monster with more power. The mere selection of the drafting committee by persons of self-proclaimed virtue is no guarantee that the members of the Lokpal will walk the straight line.
Second, it should be a viable organization unburdened by unmanageable amounts of work. The Lokpal will prove ineffective if millions of grievances and complaints of misconduct are entertained by it. The Lokpal should focus on corrupt acts, nothing else. And, even among cases of corruption, it will have to choose some for direct attention. The remainder will have to be referred to the usual investigating machinery.
Third, the Lokpal should be able to act without prejudice towards anyone. To say that the politician is ab initio suspect would be to create an unfair prejudice. Every section of our people – politicians, bureaucrats, corporate honchos, educationists, mediapersons, and civil society leaders – is equally susceptible to the malady of corruption and it is absolutely unfair to single out a particular section for special treatment.
FOURTH, it should be realized that one organization cannot remove the governance deficit accumulated over decades. There is an administrative set-up which cannot be wished away by some spirited individuals. Creating confusion in the administrative set-up would be counter-productive and frustrating. The Lokpal being envisaged is sought to have an over-concentration of power without effective checks and balances. The administrative reforms should not be unidimensional. They should be holistic and should take account of the requirements of various agencies of the government. The authority and responsibilities of other state structures cannot be usurped by a single organization. This is neither achievable nor desirable.
There are several other provisions in the draft that require wider consultation across civil society. The print media has highlighted diverse views on several clauses, the euphoria of Hazare’s victory notwithstanding.
There has been understandable criticism about the nomination of civil society members of the drafting committee. It has been said, “The Lokpal charade is about politics, about the sharing of power between the elected and the self-selected.” Many have questioned the “authentic” voices of the people selected by a coterie around Hazare. Doubts are being raised about the accountability of these persons.
I have no problem with these persons or any other representatives of civil society being on the drafting committee. I don’t care who is on the committee. But I do care that those who represent civil society should not have closed minds. I think it is imperative for these persons to have consultations with other groups and legal experts to ensure the practicality and effectiveness of the new institution apart from the legislation being legally sound. They should try to become the voice of a larger civil society rather than of a few media celebrities.

Advisory emasculation

Advisory emasculation 
The centre of power that earlier lay in the hands of the Prime Minister has been lost in the labyrinth of several compulsions

IN the past five decades, the US administration has been confronted with the need to take momentous decisions on two occasions. The first was when President John Kennedy had to issue an ultimatum to the Soviet Union on the Cuban crisis. The second was more recent, when President Barack Obama faced the need to issue orders for a special team to carry out an operation to kill Osama bin Laden. Both these historic moments were fraught with the danger of an escalated conflict.
If India is ever confronted with a similar situation, our Prime Minister would be in an extremely difficult position in issuing direct orders as he would have to pass through a maze of advisory panels that have come into existence in the past seven years. The centre of power, earlier in the hands of the Prime Minister, has got caught up in a labyrinth of compulsions. In fact, coalition politics has deprived the Prime Minister of even the prerogative to select his colleagues in the Council of Ministers. They are now chosen by the coalition partners and even their portfolios are decided beforehand through negotiations with Congress president Sonia Gandhi.
As a result, Manmohan Singh could not ask Telecom Minister Adhimuthu Raja to submit his papers when found guilty of not only defying the Prime Minister but also violating the norms of collective responsibility. The Prime Minister had to wait for months to get DMK chief M Karunanidhi’s approval for the sacking as well as the green signal from Sonia Gandhi.

Jawaharlal Nehru had told Kripalani that the Prime Minister would be superior to the party chief as the former was accountable to the people through Parliament.

The Prime Minister could not convince the media that the compulsions of coalition politics caused the delay in action nor could he tell them that the centre of power does not lie with him. In fact, Manmohan Singh has never possessed the centre of power since the day he accepted the office of Prime Minister. He was not a leader elected by his party in Parliament on the basis of his own strength. He was a nominated entity to bring into being a strange equation of a power-sharing arrangement.
In 1946, Jawaharlal Nehru had told Acharya JB Kripalani that the office of the Prime Minister would be superior to the party chief as the former was accountable to the people through Parliament. In reversal of this principle, Manmohan Singh was laden with accountability and office but not the requisite power.
He was also laden with a superior Cabinet outside his government in the form of the National Advisory Council (NAC) under the chairmanship of Sonia Gandhi. It deprived him partially of authority on even the economic policy of the government because the NAC preferred the welfare state as the objective of governance. Its two schemes, job guarantees and food security for poor families, were to drain nearly one-fourth of the national income for consumption needs through provision of immediate and temporary relief from hunger instead of empowering the poor. It was a sure recipe to drive the economy towards bankruptcy.
But the Prime Minister could not argue his case even after he received support from M Narasimham, the economic expert and former Governor of the Reserve Bank of India, who called the scheme for food security impractical as the administration, lacking in efficiency, was incapable of meeting the task evolved by the NAC. The argument was not accepted.

The centre of power that earlier lay in the hands of the Prime Minister has been lost in the labyrinth of several compulsions

Past Precedents
NONE of India’s past Prime Ministers had advisory panels for political or economic issues and took crucial decisions on their own as head of government. Jawaharlal Nehru, the first Prime Minister of India selected the Soviet model for his economic development strategy while at the same time choosing the Westminster model of a liberal parliamentary system. It was a momentous decision born out of his belief that individual freedom was foremost. India adopted the system of adult franchise for its elections when not many countries had done so.
Nehru also created the Non-Aligned Movement (NAM) and kept a hundred nations at equidistance from two superpowers and their supporting blocs even when the two giants wielded the power of assistance in political, economic and scientific spheres for developing nations. He charted out the best position for India in the world comity through his foreign policy without the aid of any advisory panels.
Lal Bahadur Shastri fought two wars with Pakistan, giving a befitting reply to our neghbour’s misadventures. He negotiated peace with Pakistan in Tashkent without being trammelled by any advisory panel.

Indira Gandhi
nationalized banks and abolished privy purses without anyone attempting to advise her. She restored parliamentary democracy after the short-term hiatus of the Emergency, without advice and in the face of the stiff resistance from the extra-Constitutional authority that her younger son, Sanjay Gandhi, had become due to the adulation of the coterie around her. She knew she faced the debacle of loss but it did not deter her from calling for elections to the Lok Sabha in March 1977.
In 1971, she asked President Richard Nixon and his advisers to pipe down, saying she would solve the problems caused by the huge influx of refugees from East Pakistan through a limited armed conflict. She did not need advisers to tell her to unilaterally declare a ceasefire on the 14th day and keep the US Seventh Fleet away from Bangladesh’s shores and desist from any operation to rescue the stranded military personnel of Pakistan after their defeat.
Rajiv Gandhi did consult a variety of individuals for the realization of his vision for the country as Prime Minister but he was not bound by any formal panel of advisers. He launched India into the modern era and expedited the process of modernization of the agrarian economy-based society through his five technology missions. But he became caught up in a maze of charges over defence deals because his strategies were evolved by a set of advisers around him who were nothing more than rootless wonders who could not get elected even to the upper House from their States.

PV Narasimha Raosimha Rao
refused to bow to external authority and step out of one of the two posts he held – Prime Minister of India and president of the Congress party. He launched India in a new direction by inviting the market forces to exploit India’s resources to speed up the economic growth rate and pull the country back from the brink of certain collapse. He ran a minority government and survived even after the blow of the demolition of the Babri Masjid in December 1992.

Chandra Shekhar could pick up the telephone and call the US President to tell him that he was not going to provide refuelling facilities to US fighters headed for Iraq in December 1990.

Atal Behari Vajpayee went in for a nuclear test without taking his Cabinet colleagues into confidence. His style was not cramped. He went on a bus ride for a peace mission to Lahore and then fought a war in Kargil. He took the bold decision of inviting Gen Pervez Musharraf for peace talks to India even though he had played a pivotal role in launching the Kargil misadventure. His invitation was from a position of strength as India was already recognized as a nuclear power state.
There are also instances of these Prime Ministers remaining unaffected when their own partymen tried to undermine their position. BJP president M Venkaiah Naidu had to rush to Vajpayee’s residence and fall at his feet for making the mistake of projecting LK Advani as a leader of equal stature. HD Deve Gowda preferred to walk out of office with his head held high rather than submit to unreasonable demands from Congress president Sitaram Kesri. IK Gujral also chose to relinquish office rather than submit to demands that he sack the DMK members of his Cabinet even though he knew that the mid-term poll would not return him to power.
In all these cases, the centre of power lay with the Prime Minister and not outside his office as it is today. Tragically, no one allows Manmohan Singh to forget the fact.

THE NAC also refused to give a thought to the fact that its two schemes were in contradiction with the instrument of governance that the country had adopted two decades earlier when the market forces were warmly received to exploit our ample resources, including cheap human labour. That choice of instrument is no longer in consonance with the newly defined objective of governance that has now been forced upon the governmeThe market economy, by its nature, cannot sustain the concept of the welfare state as it depends on large-scale charity by the state. But the needs of electoral politics enjoin upon the Congress chief to go in for pleasing the poor and retaining their vote. Other parties also found nothing wrong in the contradiction that was too patent for anyone to miss. They paid lip service to the need for a human face to the economic reforms. Yet, the four governments that followed the PV Narasimha Rao regime (that accepted the prescription by the Bretton Woods Twins for bringing back the Indian economy to the rails from the brink of collapse) have vigorously pursued the economic stance bequeathed by that government. No government could convince the market forces to accept the obligation of social causes. In fact, the National Democratic Alliance even boasted of a “Shining India” as its election plank in 2004, believing it had achieved the rate of growth dreamed of in the past.

Manmohan, laden with a superior cabinet outside his government in the form of the NAC under the chairmanship of Sonia, has lost authority on the economic policy.

The high economic growth was achieved because white goods production contributed more to the Gross National Product than essential goods. It was responsible for widening the existing economic inequalities with the difference between the highest and lowest incomes becoming 55 times. The market economy had driven the Indian economy to a position where life had become very difficult for the poor and even the middle class. Under the guidance of the World Bank, every service became costly as the government began to recover even maintenance costs in addition to original investments in providing services. The new objective of the welfare state did not provide any relief for the poor. On the contrary, they suffer even more due to diversion of resources from social welfare programmes to consumption needs for the two NAC schemes. schemes.
Several decisions in recent months were of a dubious nature. Numerous scandals added to the woes of the government and the Congress. Their image took a nosedive. A remedy was sought in appointing one more advisory panel for the government. The NAC was formed without any participation by the party in either the evolution or the implementation of the schemes. Eminent people were selected from fields of social activities, outside the party. However, each had attended to a single aspect of national life. They were apparently not attuned to taking an objective view of the entirety of national needs. Their satisfaction was confined to ensuring that the poor got an ample quantum of food at cheaper prices (even objecting to the use of the term “cheaper food”, insisting on the word “affordable”).
Now, a new advisory panel has been constituted – a party affair with three party office bearers and three Ministers acting as advisers to the party chief. It has not been so named but it would be virtually functioning as an informal political affairs subcommittee outside the Cabinet. Never before has such an instrument been imposed on the Prime Minister – perhaps out of an inference that such an imposition would be an indirect expression of a lack of confidence in his ability, understanding and vision. There was no question of any imposition in the past because of the personalities of Nehru and Indira Gandhi.
But none of the non-Congress Prime Ministers was burdened with such an imposition on their functioning from outside even though most of these governments were coalition exercises. Coalition partners conveyed their displeasure on any issue through private channels.

The PM could not ask A Raja to submit his papers when he was found guilty of not only defying the Prime Minister but also violating the norms of collective responsibility.

TWO panels – the NAC on the economic front and the party panel on the political front – have been described as advisory panels. However, the party chief presides over them. That limits the Prime Minister’s scope to ignore their advice. Hence, they are super bodies outside the formal structure of the government presided over by the Prime Minister. How will this affect the system of governance? During the last election campaign, the Leader of the Opposition, LK Advani, had charged the Prime Minister with being weak as he had to depend on approval from his party chief. By appointing two panels, the Congress has merely confirmed that Advani was not far from pointing out the reality of the current system of governance.
Of course, it can also be argued that this system is more democratic as many more heads are involved in governance and in decision-making. At the same time, a sceptic might come up with the age-old proverb that too many cooks spoil the broth. But, can the head of the government be expected to function by negotiating such a maze of advisory panels? Can he take a critical decision that a historic moment thrusts upon him? Now, not only the centre of power but also the people seem to have been lost in the maze created for governance.

The prince in UP

The prince in UP 
All conversation about politics these days soon hits a dead end: When will Rahul Gandhi take over the reins in Delhi?

The most common speculation in Congress circles these days is that Rahul Gandhi will make a pitch for Delhi only after a successful showing in the coming Assembly polls in UP for which he has given a clarion call to his party workers – first from Banda last month and then from Noida and Varanasi this month. The Banda rally was thought to be so important that even Manmohan Singh went all the way to join Rahul. For the Noida show, Madhya Pradesh’s Digvijay Singh was his escort. Varanasi was a bigger affair. That was made the venue for a special session of the UPCC where Rahul was expected to unravel his “Vision UP”. Sonia Gandhi addressed the rally on the concluding day.
But, despite all the effort that the UP Congress under Rahul is making, there is no sign of the party making headway in the most caste-ridden State in the country. Rahul is, no doubt, enthused by the Congress success in the last Lok Sabha poll in which his party was able to bag 22 of the total 80 seats. It must be counted as a big success after a long dry run in several successive Lok Sabha and Assembly elections. Rahul’s ambition now is naturally to double the number of Congress seats in the next Lok Sabha election in 2014. He wishes the next UP Assembly poll would serve as a precursor to that success so that he can legitimize his eventual claim to the hot seat in Delhi. For that he would need to at least quadruple the Congress’ present Assembly tally of 22, that is, a figure somewhere close to 100. That will lend credibility to his claim to leadership at the national level and establish the fact that his vision has the expanse and strength to eventually win back UP for the Congress.

But, despite all the effort that the UP Congress under Rahul (above right) is making, there is no sign of the party making headway in the most caste-ridden State in the country.

There are, however, many problems in the way of achieving this goal. First, the Congress in UP has no credible leader. Congressmen may claim to have many leaders but they are all without followers. Second, the Congress has been so long out of power in UP that its workers at the grassroots level have no fight left in them to win an election. Third, despite all the talk of reviving and rebuilding the party, neither the leaders at the top nor the workers at the grassroots have so far come out with any ideas on how to do that. The Congress’ winning social combination of Dalits and Muslims around the core support group of Brahmins was smashed by the rising backward peasant castes in the late 1960s under western UP’s Jat leader, Chaudhry Charan Singh.
The party bounced back briefly in the 1970s but only to be utterly shattered by Mayawati’s re-engineered combination of Brahmins and Muslims around the core of Dalits. In a way, Mayawati did not do much. She took over the old Congress caste and community base and put it upside down both in terms of caste and class. She built her new social alliance around the Dalits but with the now changed slogan of sarvjan hitaya instead of the earlier chant of bahujan hitaya. She addressed the poor and the underprivileged of all castes, especially the Brahmins, the Dalits and the Muslims. The Congress appeal too was addressed to the same castes and communities but not to the same class or strata of them.
The Congress had actually continued the British practice of ruling with the support of the leading families of the castes and communities it represented. The Congress was an upper caste party with the Brahmins forming its core and providing most of its leaders. It was not that the Congress had only the support of the Brahmins, Dalits and Muslims. The three formed the core with the Brahmins constituting the stem but there were other caste groups also on its side. These were the peasant castes that later came to be called the backward castes or classes. When, in later years, the backward peasant castes, benefiting from the abolition of zamindari and land reforms, irrigation works, increased availability of chemical fertilizers, improved seeds and so on, attained political consciousness and sought political power, they found no room for themselves in the Congress because all the positions of power and influence in that party were already occupied by its upper caste leadership. There was little room for them in the BJP either because there too all positions were already in the hands of the Rajputs, Khatris and Banias. They were therefore left with no option but to forge new political instruments of their own in the form of the Socialist Party, BKD, Lok Dal, Samajwadi Party, and so on. Dr Ram Manohar Lohia was the first to wean them away from the Congress. Later, Chaudhry Charan Singh came to represent them, especially in the western part of the State.

Mayawati’s (above) appeals to the common class interest of the economically poor of the upper castes by recasting her ‘bahujan’ slogan as ‘sarvjan’.

Still later, when Kanshi Ram and his political disciple and heir, Mayawati, ploughed deeper and upturned the bottom-most strata of the Dalits, yet another political force was forged. The political mobilization of Dalits took away a large chunk of the Congress’ electoral base but soon Kanshi Ram and, especially, Mayawati realized that while Dalit consolidation could give them a political voice, it would not make them a political force on their own. To become a winning political force they needed the vote and support of other castes and communities. As the upper strata of these other castes and communities were already with other political parties, Mayawati’s best bet was to appeal to the common class interest of the economically poor of the upper castes which she did by recasting her bahujan slogan as sarvjan.
IT is to this winning combination and aggregative slogan of the BSP that the Congress needs to form a response, if it wishes to regain its lost political power in UP. And it is in this sphere that the party has so far shown itself utterly sterile. Rahul has tried to mobilize support on the slogan of aam aadmi but that is a mere imitation of Mayawati’s sarvjan and SP’s garib aadmi. Such borrowed slogans do not work in politics. Slogans must emerge from real-life experience which the Congress lacks today in UP.
sThis is Rahul’s real problem: lack of creativity. He is incapable of comprehending the nuances of complex political and social issues. So much so that some in the party who have to act closely with him are beginning to call him a “well meaning fool.” When, after his widely publicized visit to the troubled villages in Noida recently, he claimed that several women had been raped, an AICC functionary remarked, “The poor fellow does not even know how to exaggerate.” To say that women of a village have been raped amounts to attributing ill repute to all marriageable and married women of the village. That, his partymen thought, was worse than indulging in hyperbole on police murders. One doubts if, with such naivete, Rahul can really score a big win in the Assembly poll. What will be its implication for his stepping into Manmohan Singh’s shoes in 2014?

An end foretold

An end foretold 
The Left is dead, killed from within by leaders who slowly strangled the communist movement

“Death is only a beginning, afterwards comes the hard part.” – Jed Rubenfeld (The Death Instinct)

THE communist movement in India might have finally breathed its last on May 13, 2011, but an apparition by the name of the Communist Party of India (Marxist) will remain for some more time in the Indian political scenario. And its leaders will now have to live the hard part, the afterlife, for a communist party that has no capability of launching a radical movement is like a body without a soul.
The communist movement had played a great role in this country. Notwithstanding some major mistakes, its glorious tradition of siding with and working for the uplift of the downtrodden, the farmers and the labour class will be remembered by future generations. They will also remember how the party that was its soulmate backstabbed it, particularly during the second half of the first decade of the new millennium.
Yet, can electoral defeat be equated with the death of the movement? Prakash Karat does not agree that the movement is dead. The General Secretary of the CPI(M) tried to put up a brave face and said, “Those who have written the epitaph of the CPM and the Left are wrong. We will prove it.” This same General Secretary failed to protect the movement from the shining knives of his comrades.
Another view came from Gurudas Dasgupta. The leader of the CPI Parliamentary Party and General Secretary of the largest Left union, AITUC, said, “This premise is based on what has happened in Bengal. But Bengal is not India, India is not Bengal.”
But do the communists retain enough credibility for people to trust them? Communist ideology makes a radical movement against the system an integral part of its existence. The rise of the communists in India is replete with instances of such movements. Tebhaga or Telengana were just major ones.
Numerous smaller ones in Kerala, Andhra Pradesh, Bihar, Maharashtra, Bengal and other places shaped the future of the communists from the 1930s to the ’70s. Internal divisions in the undivided party occurred, and the splits weakened it. Yet, Bengal, Kerala and Tripura voted for it in elections. From the late 1970s, communist-ruled States became a common phenomenon. Even the Centre had communist Ministers during 1996-98, including a Home Minister of the country. Bengal made history of sorts by reposing its faith in legendary democratic ruler Jyoti Basu five times.
People were voting for the party in some regions of the country because of its credibility, earned from its tradition of fighting for the common man, the poor, farmers, tribals and industrial labour. Basu was not a revolutionary but he had some basic training in working for the underprivileged, and that heightened his credibility among the masses. Under his aegis, the “movement” underwent a metamorphosis but remained alive through demands for “more power for the States” or allegations of “reluctance of the Centre to protect the interests of the common man”.

India’s modern-day communists have thus become a symbol of oppression, while Nandigram-Singur have become the new Tebhaga-Telengana.

The same line was adopted by the Kerala and Tripura units, and also by other States where the party or the Left as a whole was weak. It had no revolutionary undertone, but a simple pro-poor leaning. And that kept the credibility of the party intact despite charges by the media of arrogance, misrule and corruption.

Entry of neo-liberalism
And then everything changed. A new set of leaders started pushing the party towards the opposite end. Economic reforms had happened and globalization became the mantra. The elite had started projecting a neo-liberal path as the only one. And a large section of the CPI(M), not well versed in the reality of the vast majority of Indians, accepted this.
From 2004 to 2008, the period when the Left supported a Congress government, the party backstabbed the glorious tradition of the communist movement. The leaders decided to confront the reality instead of blindly opposing it. That was what they principally decided in 2005 and later gave final shape to. It was a ploy to accept the changes around them.
Then they supported the Patents Bill, the SEZ Bill, kept silent as big Indian players entered the retail sector, and each time put forward “notes” and “amendments”. It was just like the Social Democrats who try to make the system less painful by reforming it. The Social Democrats, however, do not pretend to be great revolutionaries or angels, and they do not hide their true intention.
Indian communists thus, in the last decade, stood against the very values taught by the communists of earlier generations. Now, they do not have any moral authority to point fingers at others. If they try to evoke the glory of Tebhaga - Telengana, what will be evoked is laughter as people will remember Nandigram for decades. If they talk of fighting the feudal set-up in the rural areas, the populace will mockingly point out that these are the very people who supported the establishment of SEZs or neo-zamindari of the industrialists in 21st century India. If they raise the issue of fighting “imperialism”, people will reject their claim as they voted for the Patents Bill. If they talk of fighting the industrialists or tax concessions, people will read out the agreement signed with Tata Motors for a proposed Nano factory at Singur.

Indian communists in the last decade stood against the very values taught by the communists of earlier generations. Now, they do not have any moral authority to point fingers.

 Modern-day communists think they are beyond reproach. This makes them so near-sighted that they miss the writing on the wall. In my book, Understanding CPI(M), published in January 2010, I predicted the impending debacle. The prediction does not add to my credit, because it was writ large on the wall. But the communists, instead of acknowledging the truth, tried to create myths and survive on them.
RADICAL communists have always terrorized people in their strongholds. They did it in the name of class interest. But, in the past decade, their legendary “organization”, now bereft of proper ideological moorings, turned into a collection of wily people with steely nerves, and a tyrannized populace. The degree of this tyranny can only be experienced, and can never be assessed by visitors. That is why many pundits failed to fathom it, even in 2011. This tyranny was at its apex in Bengal (in Midnapore, Bankura, Purulia, Hooghly and Bardhaman districts), for the support system was provided by the police and administration.
I hope my readers still remember Nandigram, where the Leftists killed peasants and unleashed unimaginable atrocities. For many months, Sitaram Yechury and others briefed the press about the heinous character of the movement, about the conspiracy of the opposition parties, and the demonic role played by the Maoists. Since then, in every election, the Left has been thrown out from that area, and now the whole district of East Midnapore has rejected them outright. In this Assembly election, out of 16 seats in the district, the Left failed to win a single one. So, have the people voted for heinous conspirators and the Maoists? Yechury’s explanations are awaited.
The reality of Nandigram was the opposite. Such was the degree of repression by the CPI(M) cadre that the people carried on their revolt for years and finally liberated the area. The movement has assumed added sheen after these electoral results.
India’s modern-day communists have thus become a symbol of oppression, while Nandigram-Singur have become the new Tebhaga-Telengana. As for the proposed plant at Singur, the communist government could not even divulge the details of the agreement with Tata Motors. Whatever has become public shows how the State government acted in just the opposite way to what Karat preaches in Delhi about tax exemptions.

Kerala and VS
In Kerala, the Left has done well this time. It has almost broken the tradition of change after every five years. However, the credit goes entirely to VS Achhuthanandan, who has a much larger image than his party. He is the symbol of the Left movement in that State, and is known as a crusader against corruption. Just like Bengal, Kerala has seen the rise of a group of neo-liberals (though they are not in love with the Congress, unlike their Bengal comrades) and Achhuthanandan has fought these tendencies as Chief Minister. For that, the CPI(M) heckled him for years and the General Secretary of the party joined the bandwagon of the hecklers in the past few years. This legendary leader was thrown out from the Politburo. By voting for Achhuthanandan, the people of Kerala have shown their disdain for these party bureaucrats sitting in Thiruvananthapuram and Delhi. A veteran Congress leader from the State confided that their narrow escape from the jaws of defeat was in total contrast with what they expected, an overwhelming victory. And he felt that the people voted for Achhuthanandan not only against the Congress, but also against the organizational leaders of the CPI(M).
But the veteran leader is now 87 years old and by the next Assembly elections will be 92. Too old to lead. And without him the party will be reduced to just an ordinary alternative to the Congress in the State, without any claim to any glorious tradition.

What now?
In both Bengal and Kerala, CPI(M) leaders are expressing a desire to join other parties. Bengal CPI(M) leader Debendranath Biswas, who did not contest the election, wants to join the Trinamool Congress as he cannot serve the people by staying in the CPI(M) as it has become too corrupt.
So Karat has a long way to go to keep alive the spirit of the dead movement. He may try to inject a minimal dose of “Leftism” in his party. But the discredited lot of Bengal, mainly Buddhadeb Bhattacharya, Biman Bose and Nirupam Sen, are likely to resist that. As for Pinnarai Vijayan (the all-powerful Secretary of Kerala and friend of Karat), he will wait for Achhuthanandan’s eclipse due to age and then will try to follow a neo-liberal agenda.
Karat, who has always tried to act as a hardliner, has little chance of seeing fruitful “rectification” taking place in his party. He himself is a man from the organization, and he is not capable of understanding the simple fact that the organization is no more an asset for him but a liability increasingly loathed by the common man. It is equally true in Bengal and in Kerala.
Yet, resurrection of the communist movement cannot be entirely ruled out. If it does get another lease of life, it will not be at the behest of the CPI(M).

Ten years... and still counting

Ten years... and still counting 
The IAF might be crying for fighters but the MoD has no sense of urgency

THE Panipat syndrome runs deep in the psyche of the Indian political class and its cronies. Even though India’s neighbourhood is packed with elements threatening to drop nasty garbage on our head, the defence procurement policy has no sense of alarm nor is there any urgency to build a modern military-industrial complex on our own.
Take the case of the Medium Multirole Combat Aircraft (MMRCA). Ten years after India sent out the Request for Information (RFI) in 2001 for purchase of 126+ MMRCA, the Ministry of Defence (MoD) announced this April that two aircraft, the Eurofighter and Dassault’s Rafale, have been shortlisted. India’s planned multibillion-dollar purchase of 126+ fighters had led to a contest between France’s Dassault, Sweden’s Saab, Russia’s MiG, EADS’ Eurofighter and American manufacturers.
Amid all the vendors/contractors and the MoD, it became a game of patience. A Request for Proposal (RFP) was issued six years after the RFI, even as India’s existing fighter fleet continued to wear out, and China’s and Pakistan’s fleets continued to grow. It has taken four years since to shortlist the vendors. That too because the IAF put its foot down at the leisurely pace of the MoD.
The sanctioned strength of the Indian Air Force is 39.5 squadrons. However, 45 squadrons is considered a healthy level. With the acquisition of Mirage-2000s, MiG-29s and Jaguars in the 1980s, India reached this level.
But reduction in the number of aircraft due to retirement of obsolete aircraft, and air crash and attrition losses depleted the active force levels to 34 squadrons. Depletion to 32 squadrons took place following further phasing out of aircraft. If corrective measures are not taken immediately, the strength of active IAF squadrons may dip to 27 in the next five years.
Originally, the indigenously built Hindustan Aeronautics Limited (HAL) Tejas, developed by DRDO, was to replace the ageing MiG-21 fleet. With the Kaveri jet engine failing to come up to expectations, the Tejas project was stalled. Tejas is a Light Combat Aircraft and its price is around $25 million per plane. The final tests on Tejas were conducted this January and, if all goes well, the aircraft should be operational by the end of 2012.
The original objective behind the fighter purchase was to find aircraft that would fit between India’s high-end Su-30 MKIs and its low-end Tejas lightweight combat aircraft. While plans to develop a “fifth generation fighter” in collaboration with Russia have been there for years, they are uncertain at best, address a different requirement, and offer no solution to the immediate problem of shrinking squadron numbers.
The RFP announcement in mid-2007 estimated the cost of 126 MMRCA at Rs 42,000 crore (about $10.24 billion or about $81.3 million per fighter). The 211-page document included clauses for initial purchase, transfer of technology, licensed production, and life-time maintenance support for the aircraft. Under the terms of purchase, the first 18 aircraft would come in fly away condition, while the remaining 108 would be manufactured under transfer of technology. Some reports added an option for an additional 63-64 aircraft on the same terms, bringing the potential total to 190 aircraft.
The vendor who finally wins will be required to undertake 50% offset obligations in India. That’s a boost from the usual 30%, which is required for Indian defence purchases over $70 million. The additional 20% was added because India is looking for a large boost to its aerospace and defence electronics industries, and understands that the size of their purchase gives them additional leverage.
Also, politically, it has become too risky to take bribes from foreign vendors following the Bofors and HDW scandals; and so Indian companies are being propped up, according to some political sources, to take the place of foreign vendors for political and personal contributions.
It may be recalled that Defence Minister AK Antony, while chairing the Defence Acquisition Council Meeting on June 29, 2007, had outlined three guiding principles for this procurement scheme. First, the operational requirements of the IAF should be fully met.
Second, the selection process should be competitive, fair and transparent, so that best value for money is realized. Lastly, Indian defence industries should get an opportunity to grow to global scales. Time will tell if the objectives of the MoD’s RFP are met, or if a process of waiting almost six years for an RFP, and then years more for a winner, is only the beginning of the process. It is not clear as yet what the Contract Negotiating Committee (CNC) has negotiated on offsets with the shortlisted vendors in particular, and the loser competitors in general.
At the moment, there is no murmur. Because all the four “losers” have other things to look forward to. Boeing is negotiating on the C-17 Globemaster III and Orion; Lockheed is negotiating for additional C-130J Super Hercules; Saab is negotiating for defence electronics; and the Russians are negotiating for a range of things.

Rafale (Dassault, France)
The Rafale offers good aerodynamic performance, has exceptional ordnance capacity for its size, and can have its range extended via conformal fuel tanks. Dassault claims Mach 1+ “supercruise” capability without afterburners, but observers are sceptical. The Rafale’s weaknesses include the continuing absence of a compatible surveillance and advanced targeting pod, the need for additional funds and work to integrate many non-French weapons if one wishes to use them on the Rafale, and its lack of an AESA radar until Thales finishes developing the RBE2-AA.

Eurofighter (EADS, BAE) A fourth generation aircraft currently optimized for the air-air role through its performance characteristics, and what is by all accounts an excellent pilot interface. Some observers believe that, aside from the F-22A Raptor, the Eurofighter is the next best in-service air superiority aircraft worldwide, though the 2007 Indra Dhanush exercise that matched it against India’s Su-MK1 makes a case for Sukhoi’s fighter.
India’s delay has given the fighter more time to mature, and upgrades and new weapon options are giving current production versions full multi-role capabilities. Eurofighters reportedly have “supercruise” capability, though it probably is not sustainable once the fighter is armed. Eurofighter GmbH even unveiled a proposed naval variant at Aero India 2011, which it claims could launch without catapults from the “ski-jump” decks on India’s future carriers.

F/A-18 E/F Super Hornet (Boeing, US)
Highly upgraded version of the F/A-18 AD Hornet, enlarged and given new engines and avionics. Commonality between the Hornet and Super Hornet is only about 25%. Strengths include its powerful AN/APG-79 AESA radar, which has drawn significant interest from India. This radar could allow Super Hornets to play a unique role in India’s fighter fleet as versatile “quarterbacks” (or better yet, “cricket captains”) due to their radar’s performance and information sharing abilities. Other advantages include carrier capability, a very wide range of integrated weapons, a design that is proven in service and in combat, F414 engines that may also serve as the base for LCA Tejas Mk2; and complete assurance in its future upgrade spiral, given the US Navy’s commitment to it.
Weaknesses of the Super Hornet platform included deep distrust of America’s reliability as an arms supplier, technology transfer concerns, and the aircraft’s expense. Given the costs to other customers so far, it seems unlikely that Boeing can deliver 126 fully-equipped F/A-18 E/F Block II aircraft for just $10.2 billion, let alone aircraft plus lifetime support. The Super Hornet also offers poorer aerodynamic performance than the Eurofighter or Rafale, due to inherent airframe limitations. Finally, it’s a new aircraft type for the IAF, so the entire support infrastructure would have to be developed from the ground up.

F-16 Fighting Falcon (Lockheed Martin, US)
Lockheed’s “Block 70” offering would have been a modified version of the F-16E Block 60 “Desert Falcon”, currently serving with the UAE. Strengths include the widest multi-role capability among lightweight fighters; its proven AN/APG-80 AESA radar; the addition of integrated IRST (Infra Red Search & Track) capability; the widest choice of proven avionics and weapon systems; a long record of proven service so all issues are known; and widespread compatibility with potential allies in Asia and the Middle East who also fly F-16s. The combination of an AESA radar on a less expensive platform is also good news for cruise missile defence efforts, if that’s considered a priority.
Weaknesses include the fact that Pakistan also flies F-16s; the fact it’s a new aircraft type, so the entire support infrastructure would have to be developed; and Lockheed Martin’s difficulty in complying with industrial offset provisions, given their lack of penetration in India. The MMRCA RFP’s delays may have helped Lockheed, by allowing them ample time to find arrangements with Indian firms. There are also reports that the US government was pushing this option, because of the regional reassurance factor. While an F-16 E/F Block 60+ would have a number of important advantages over Pakistan’s F-16 A/Bs and even its new Block 50/52 aircraft, the common underlying aircraft type would probably take some of the edge off the deal from Pakistan’s point of view.

MiG-29OVT, became the MiG-35 (Roson boron export, Russia)
This modified MiG-29 includes improved radar and avionics that give it multi-role capability, extra fuel in a new aircraft “spine,” and thrust-vectoring engines a la India’s Su-30 MKIs. While the MiG-29 has traditionally been considered a lightweight fighter, the combined effect of these changes pushes the MiG-29 toward the mid range.
Its strengths include compatibility with India’s existing and future MiG-29 fleet, and its ability to carry advanced Russian missiles already in service: the revolutionary AA-11/R-73 Archer and longer range AA-12/R-77 “AMRAAMski.” The presence of MiG-29-related manufacturing and maintenance, including a new plant for licence-building RD-33 Series III engines in India, would make compliance with industrial offset requirements easier.
The MiG-29’s biggest weaknesses are short range, engines that produce telltale smoke (very bad in air combat) and lack of true multi-role capability. The MiG-35 largely fixes these issues, and may even add an AESA radar of its own if Phazotron-NIIR can have its new Zhuk-AE ready in time. Remaining weaknesses in the MiG-35 bid include the serious difficulties India has had with Russian firms over the refit of its new carrier, order for more Mi-17 helicopters, and order for three more Krivak-III class frigates. All have featured failure to deliver, and post-contract price renegotiation demands that have raised prices up 200%. Reports that MiG-35 delivery cannot start before 2014 at the earliest add a further disadvantage, especially compared to competitors with active production lines and rapid delivery capability.

JAS-39 Gripen (Saab, Sweden)
The Gripen is a true 4th+ generation lightweight fighter and significantly more capable than category competitors like the F-16 and Mirage 2000, though the MiG-35 may give it a run for its money. Gripen NG begins to address the aircraft’s range limitations, and would include an AESA radar among its other enhancements. Other strengths include a wide choice of integrated weapons and pods; reasonable purchase cost; the fact that it has been designed for exceptional cost of ownership; and the ability to operate from roads instead of runways if necessary. With respect to industrial offsets, Saab has made a strong offer, backed by excellent record in countries like South Africa, Hungary, the Czech Republic et al. As an interesting side note, the JAS- 39NG’s use of GE’s F414G engine would create future commonality with India’s own Tejas Mk2, which will also be powered by the F414 after DRDO’s Kaveri engine failure put the entire project in jeopardy.
The JAS-39’s drawbacks include its short range; the fact it’s a new aircraft type for the IAF; its AESA radar’s developmental status; perceived similarity (whether valid or not) to the Tejas fighter’s potential performance; and a low volume of international orders to date that raises questions about the platform’s ability to modernize over the next 30-40 years.

(With inputs from Defense Industry Daily)
No sympathy for a rogue state
Pakistan had it coming, for not behaving like a dutiful client state



NATIONS, like individuals, have multiple identities and may be seen in ways that are not flattering to their self-image. In the wake of the US transgressing Pakistani sovereignty, independence and territorial integrity to kill Osama bin Laden, there’s little sympathy for India’s western neighbour as a victim. The general view is that Pakistan not only had it coming, but was asking for it.
Because it is a US client state. Pakistan may be America’s favourite in the Muslim world and in South Asia, but it is also America’s favourite whipping boy. It keeps feeding goodies – over $20 billion in the past 10 years – to this baddie in the hope that it will aid the US in its fight against terrorism. Far from doing that, Pakistan failed to deliver as a dutiful client state. Instead of aiding the US fight against terror, Pakistan’s “deep state” – an euphemism for the military and its intelligence wing, the Inter-Services Intelligence – was hand-in-glove with select terrorist groups, perhaps spawned by it.
Whenever the nexus between state agencies, like the Army, and terrorists was exposed, the government scoffed at these reports. These links were dismissed as rogue elements in the ISI and Army. Less than 10 days before bin Laden was killed, Maj-Gen Athar Abbas, Director-General of Inter-Services’ Public Relations, told visiting Indian journalists in Rawalpindi that there was not the least truth in reports linking the ISI to terrorists.

Instead of aiding the fight against terror, Pakistan’s ‘deep state’ was hand-inglove with terrorist groups.

“We have suffered huge casualties, an average of 10 every day in 2009, and ISI offices have been targets of terrorist attacks. We won’t harm our own (men and cause),” said Maj-Gen Abbas. Around the same time, the Army chief, Gen Ashfaq Kayani, speaking at a military academy in the vicinity of bin Laden’s hideout, claimed to have “broken the back of terrorism” in Pakistan. And, all along, it was supporting and harbouring terrorists of diverse shades such as the Al-Qaeda factions, the Afghan Taliban, the Lashkar-e-Toiba and the Jaish-e-Muhammad. The Army went after the Pakistan Taliban alone, because it was a threat to Pakistan.
The US, like India, knows this. The US drone attacks were aimed at wiping out factions other than LeT and JeM in Pakistan’s Northwest and on the Afghanistan border. But the drones were killing more civilians than terrorists, provoking outrage and protests.
As a client state, Pakistan could do little about it. A client state is a country that is economically, politically, or militarily dependent on another country – like Pakistan on the US. So, though the drone attacks were condemned by all sections, including Parliament, the government, political parties and the armed forces, the US did not relent.
For all its protests, Washington is only too aware of Pakistan’s impotence in standing up to the US. Thus, we have the US Joint Chiefs of Staff Chairman, Admiral Mike Mullen, landing in Islamabad on April 20, on what is now known was a recce for taking out bin Laden. Whoever he wanted to meet, from the President down, had to be available.
Never mind the drone strikes, even after the loud protests over the intrusion to kill bin Laden, Pakistan’s political and military bosses are on bended knees when it comes to the US. In any other country, the Americans would have kept away, fearing public anger. Not in a client state, even if it is a rogue client state.
They troop in and out of Pakistan at their whim. The high-profile Senator John Kerry, Chairman of the Senate Foreign Relations Committee, visited Islamabad in mid-May and called on the generals in Rawalpindi before talks with the President and Prime Minister. In a client state, force is what matters to an imperious power.
For all its noises about democracy and the need for civilian government to prevail over the armed forces, when it comes to business, America’s elected elite prefer the military bosses in Rawalpindi. Pakistan is a high-value and difficult client state, but its Army and Washington know that together they can stifle the people’s democratic aspirations.

The writer, who recently travelled to Pakistan, is a former Editor of Sunday Mail and was with China Daily and Global Times in Beijing.